Taxation Law Case Digests Hernando Bar 2023 - Compress

SEPTEMBAR 2023
Chair's
Cases
Taxation 20
Law 23
Digest of cases penned by
Associate Justice Ramon #HernanDoIt
Paul Hernando #Hernandonuts
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SEPTEMBAR 2023
BAR OPERATIONS: HERNANDO

SIBLINGS EDITION
ACKNOWLEDGMENT
Special thanks to the following contributors:
CPALawyer2023
GN
Riversioson
Michie
Bsibsi
Lably
January
"Always remember, chance favors the #HernanDoIt

prepared one." - J.Hernando #Hernandonuts
All the best to all Bar 2023 takers.
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TABLE OF CONTENTS
Topics Page
I. General Principles
A. Doctrines in Taxation
2. Compromise and Tax Amnesty
● BUREAU OF INTERNAL REVENUE VS. SAMUEL B. CAGANG, 1

G.R No. 230104, March 16, 2022
● PEOPLE OF THE PHILIPPINES VS. GLORIA F. TUYAY, G.R. 3
No. 206579, December 01, 2021
● LA FLOR DELA ISABELA, INC. VS. COMMISSIONER OF 5
INTERNAL REVENUE, G.R. No. 202105, April 28, 2021
II. National Taxation

A. Value-Added Tax
2. Tax Refund or Tax Credit
● HEDCOR SIBULAN, INC. V. COMMISSIONER OF INTERNAL 9

REVENUE, G.R. No. 202093, September 15, 2021
● ENERGY DEVELOPMENT CORPORATION VS. 11
COMMISSIONER OF INTERNAL REVENUE, G.R No. 203367,
March 17, 2021
● COMMISSIONER OF INTERNAL REVENUE VS. PHILEX 14
MINING CORPORATION, G.R. No. 218057, January 18, 2021
B. Tax Remedies Under the National Internal Revenue

2. Assessment of Internal Revenue Taxes
c) Procedural Due Process in Tax Assessments
● COMMISSIONER OF INTERNAL REVENUE VS. UNIOIL 17

CORPORATION, G.R No. 204405, August 04, 2021
d) Prescriptive Period for Assessment

3. Taxpayer’s Remedies
c) Recovery of Tax Erroneously or Illegally Collected
● COMMISSIONER OF INTERNAL REVENUE VS. SAN 25

MIGUEL CORPORATION, GR No. 180740, November 11,
2019
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4. Government Remedies for Collection of Delinquent Taxes
● BUREAU OF INTERNAL REVENUE vs. TICO INSURANCE
COMPANY, INC., GLOWIDE ENTERPRISES INC., and PACIFIC 28
MILLS INC., GR No. 204226, April 18, 2022
IV. Judicial Remedies

A. Court of Tax Appeals
2. Exclusive Original and Appellate Jurisdiction Over Civil
Cases

B. Procedures
2. Civil Cases
c) Who May Appeal, Mode of Appeal, and Effect of
Appeal
3. Criminal Cases
c) Period to Appeal
● PEOPLE OF THE PHILIPPINES VS. BENEDICTA 37

MALLARI AND CHI WEI-NENG, G.R. No. 197164, December
04, 2019
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Case Digests
J. Hernando - Taxation Law
I.F.9. Compromise and Tax Amnesty
BUREAU OF INTERNAL REVENUE VS. SAMUEL B. CAGANG

G.R No. 230104, March 16, 2022
By: CPALawyer2023
DOCTRINE:
Tax amnesty refers to the "absolute waiver by a sovereign of its right to collect taxes and
power to impose penalties on persons or entities guilty of violating a tax law. Tax amnesty
aims to grant a general reprieve to tax evaders who wish to come clean by giving them an
opportunity to straighten out their records." Simply put, it partakes of an absolute
relinquishment by the government of its right to collect what is due it and to give tax
evaders who wish to relent a chance to start with a clean slate.
FACTS:
Samuel B. Cagang is a treasurer while Romulo M. Paredes is the president of CEDCO Inc. Said
company was assessed by the BIR for deficiency taxes by the BIR (a) income tax; (b)
Value-Added Tax (VAT); (c) expanded withholding tax; and (d) withholding tax on
compensation for taxable years 2000 and 2001. CEDCO, through Cagang, as Director for
Administration & Finance, went through the proper appeal process with the BIR. However, BIR
still issued a Final Decision on Disputed Assessment (FDDA) dated September 28, 2007, which
denied CEDCO's protest.
On November 28, 2007, CEDCO availed of the tax amnesty under Republic Act No. (RA) 9480.
The amnesty granted by the law covered "all national internal revenue taxes for the taxable year
2005 and prior years, with or without assessments duly issued therefor, and that have remained
unpaid as of December 31, 2005 x x x.". CEDCO properly filed its tax amnesty payment form
and paid the amnesty tax.
In a collection letter, The BIR directed CEDCO to pay its tax liabilities based on the FDDA. Due
to CEDCO's failure to settle its tax obligations, a complaint-affidavit dated August 14, 2009 was
filed against Cagang and Paredes for violation of Section 255 of the NIRC. In the said
complaint-affidavit, Cagang and Paredes, in their official capacities as CEDCO's treasurer and
president, respectively, were charged with the alleged willful failure to pay CEDCO's deficiency
taxes for taxable years 2000 and 2001
Taxation Law_HernandoBAR2023 Page 1 of 39
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ISSUE:
Whether CEDCO is entitled to avail of the tax amnesty under RA 9480
RULING:
Yes, CEDCO is entitled to tax amnesty on their income tax and VAT but not with respect to
its withholding tax liabilities.
In 2007, Congress enacted RA 9480, which granted a tax amnesty covering "all national internal
revenue taxes for the taxable year 2005 and prior years, with or without assessments duly issued
therefor, that have remained unpaid as of December 31, 2005."49 These national internal revenue
taxes include (a) income tax; (b) VAT; (c) estate tax; (d) excise tax; (e) donor's tax; (f)
documentary stamp tax; (g) capital gains tax; and (h) other percentage taxes.
Pursuant to Section 6 of RA 9480, those who availed themselves of the benefits of the law
became "immune from the payment of taxes, as well as additions thereto, and the appurtenant
civil, criminal or administrative penalties under the National Internal Revenue Code of 1997, as
amended, arising from the failure to pay any and all internal revenue taxes for taxable year 2005
and prior years."
Section 8 of the said law enumerates those persons and cases that are not covered by the law,
viz.:
Section 8. Exceptions. -The tax amnesty provided in Section 5 hereof shall not
extend to the following persons or cases existing as of the effectivity of RA 9480:
a) Withholding agents with respect to their withholding tax

liabilities;
xxx
e) Those with pending criminal cases for tax evasion and other
criminal offenses under Chapter II of Title X of the National Internal
Revenue Code of 1997, as amended, and the felonies of frauds, illegal
exactions and transactions, and malversation of public funds and property
under Chapters III and IV of Title VII of the Revised Penal Code;
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Meanwhile, the Department of Finance's Department Order No. 29-07, which provides for the
Implementing Rules and Regulations of RA 9480, states that:
Section 5. Exceptions. - The tax amnesty shall not extend to the following persons
or cases existing as of the effectivity of this Act:
a) Withholding agents with respect to their withholding tax

liabilities;
xxx
e) Those with pending criminal cases filed in court or in the

Department of Justice for tax evasion and other criminal offenses under
Chapter II of Title X of the National Internal Revenue Coe of 1997, as
amended;
Here, the Court finds that the tax amnesty under RA 9480 does not extend to CEDCO with
respect to its existing withholding tax liabilities, as explicitly provided in the said law.
However, with respect to the deficiency taxes pertaining to CEDCO's income tax and VAT for
taxable years for 2000 and 2001, the Court finds that CEDCO is entitled or qualified to avail of
the tax amnesty considering that it had submitted the necessary documents and complied with the
requirements under RA 9480, which the BIR does not dispute.
PEOPLE OF THE PHILIPPINES VS. GLORIA F. TUYAY

G.R. No. 206579, December 01, 2021
By: GN
DOCTRINE:
Under Section 8(e) of RA 9480, only those with pending criminal cases in court for tax
evasion and other criminal offenses under the NIRC, and the felonies of frauds, illegal
exactions and transactions, and malversation of public funds and property, under Chapters
III and IV of Title VII of the Revised Penal Code, are excluded from availing the tax
amnesty.
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FACTS:
Respondent Tuyay is the Registered owner of Glo Herbal Trading and Manufacturing engaged in
the business of manufacturing, selling, and distributing the herbal concoction, Glo-herbal.
BIR issued a letter of Authority (LOA) authorizing the BIR officers to examine the books of
accounts of Glo Herbal Trading and Manufacturing for taxable years 2000-2002 as it allegedly
sold millions of its product during the said years. However, Tuyay failed to submit the book of
account required by the BIR. Thus, the revenue officers had to use the expenditure method to
reconstruct the undeclared income and deficiency taxes.
Later, the BIR issued assessment notices against Tuyay for deficiency income tax and VAT for
the taxable years. The BIR filed with the DOJ a criminal complaint for violation of Sections 254
and 255 of the NIRC. Thus, the Information against Tuyay were filed with the CTA.
Tuyay moved to dismiss the case against her on the ground that she was immune from criminal
liability in view of her availment of the tax amnesty under RA No. 9480.
Petitioner opposed the motion contending that Tuyay was disqualified to avail of the tax amnesty
because under the IRR of 9480, the tax amnesty does not extend to those with pending criminal
cases.
ISSUE:
Whether or not Tuyay was disqualified to avail of the tax amnesty
RULING:
No, Tuyay was not disqualified to avail of the tax amnesty.
Having availed of the tax amnesty and having fully complied with all its requirements and
conditions is entitled to the immunities and privileges conferred by RA 9480, which includes the
immunity from criminal liability under the NIRC.
Here, there is no dispute that Tuyay availed of the tax amnesty under RA 9480 and complied
with all the requirements. In fact, during the pre-trial hearing, petitioner admitted that Tuyay’s
application for tax amnesty was approved and that her payment of taxes was accepted by the
BIR.
The Court finds that Tuyay was not disqualified to avail of the tax amnesty because at the time
she availed of it on there was no pending criminal case against her before any court as it was
only in October 2009 that the criminal cases were filed against her with the CTA.
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And even though there was already a pending criminal case complaint against her before the
DOJ on June 3, 2005, such fact cannot disqualify her from availing of the tax amnesty because
this is not included in the list of exceptions under Section 8 of RA 9480.
LA FLOR DELA ISABELA, INC. VS. COMMISSIONER OF INTERNAL REVENUE

G.R. No. 202105, April 28, 2021
By: riversioson
DOCTRINE:
In Commissioner of Internal Revenue v. Philippine Aluminum Wheels, Inc., we ruled that

only persons with "tax cases subject of final and executory judgment by the courts" are
disqualified to avail of the Tax Amnesty Program under RA 9480, which means that there
must be a final and executory judgment promulgated by a court.
FACTS:
On September 6, 2000, the CIR issued a Letter of Authority for the examination of La Flor's
books of account for "all internal revenue taxes for CY 1999.
In connection with this, La Flor executed five statutes of limitations waivers to extend the CIR's
time to assess and collect the deficiency taxes.
On April 8, 2003, the company received a Preliminary Assessment Notice dated March 19, 2003.
On March 14, 2005, La Flor received a Formal Letter of Demand (FLD) for deficiency income
tax, value-added tax (VAT), withholding tax (WT) on compensation; and for compromise
penalty.
The company submitted its protest against the FLD on March 30, 2005, and a Supplemental
Protest Letter on April 12, 2005.
Following that, on July 9, 2007, it received the CIR's Final Decision on Disputed Assessments
(FDDA) dated June 1, 2007.
On October 8, 2007, La Flor claimed a tax amnesty under Republic Act No. (RA) 9480, as well
as a compromise on October 18, 2007, under Section 204 of the National Internal Revenue Code
(NIRC).
The CIR issued an undated Warrant of Distraint and/or Levy (WDL) to the company on
November 23, 2007. On November 29, 2007, the petitioner filed a Petition for Review with the
CTA, challenging the CIR's issuance of WDL.
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The CTA (Second Division) dismissed La Flor's petition because it was filed too late. It held that
La Flor had thirty (30) days from July 9, 2007, to appeal the CIR's FDDA under Section 228 of
the NIRC, as amended, or to elevate its complaint to the Commissioner under Section 3.1.5 of
Revenue Regulations No. 12-99. However, instead of appealing the FDDA or raising its protest
to the Commissioner, La Flor took advantage of the tax amnesty under RA 9480 for its assessed
IT and VAT deficiencies and filed an application for compromise for its assessed WT
deficiencies on October 8, 2007, and October 18, 2007, respectively. Hence, its Petition for
Review, filed on November 29, 2007, or three months after July 9, 2007, with the CTA in
Division, clearly exceeded the 30-day reglementary period. The FDDA dated June 1, 2007, had
thus become final, executory, and demandable.
La Flor filed a Motion for Reconsideration, which was denied by the CTA Division in its
Resolution of August 4, 2010. Afterward, on September 7, 2010, La Flor filed a Petition for
Review with the CTA En Banc.
La Flor's petition was dismissed by the CTA En Banc for lack of merit. It decided that if the CIR
does not act on a protest within 180 days of the filing of supporting documents, the taxpayer may
file an appeal with the CTA within 30 days of the expiration of the 180-day term. The petitioner
timely submitted its protest on March 30, 2005, when the CIR published its FLD dated March
21, 2005. On April 12, 2005, it filed a Supplemental Protest Letter in order to submit additional
documentation.
However, because the CIR did not act on La Flor's objection within 180 days of receiving its
Supplemental Protest Letter on April 12, 2005, the petitioner had 30 days from October 9, 2005,
or until November 8, 2005, to submit a Petition for Review with the CTA. The petitioner, on the
other hand, slept on its right and sought relief only on November 29, 2007, more than two years
after the reglementary period had expired. Despite the fact that the 30-day period to appeal began
to run only on July 9, 2007, when La Flor received the CIR's FDDA dated June 1, 2007, La
Flor's petition filed on November 29, 2007 was beyond the 30-day reglementary period.
Furthermore, the CTA En Banc determined that all waivers executed by La Flor were genuine.
The tax court noted that, prior to the expiration of the last waiver, the CIR issued FLD dated
March 14, 2005, which the petitioner received on March 21, 2005. As a result, because all
waivers were validly executed, the CIR's subsequent issuance of the WDL for the purpose of
collecting the assessed tax due was necessarily valid.
ISSUE:
Whether La Flor is entitled to tax amnesty
RULING:
Yes, La Flor is entitled to a tax amnesty.
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On May 24, 2007, RA 9480 was enacted into law. It granted a tax amnesty to all national internal
revenue taxes for the taxable year 2005 and prior years, with or without assessments duly issued
therefor, that have remained unpaid as of December 31, 2005 with the following exceptions.
On October 8, 2007, petitioner La Flor filed an application for tax amnesty under RA 9480.
Section 6 of DOF DO No. 29-07 provides for the method of availing a tax amnesty under RA
9480, to wit:
Petitioner La Flor presented as evidence the following documents to support its availment of the
Tax Amnesty under R.A. No. 9480: (a) Tax Amnesty Return dated October 8, 2007;51 (b) Tax
Amnesty Payment Form dated October 8, 2007;52 (c) Tax Payment Deposit Slip dated October
8, 2007;53 (d) Notice of Availment of Tax Amnesty dated October 4, 2007;54 and (e) Statement
of Assets and Liabilities (SALN) as of December 31, 2005.
Section 7 of DOF DO No. 29-07 provides that "qualified taxpayers are required to pay an
amnesty tax equivalent to five percent (5%) of their total declared net worth as of December 31,
2005, as declared in the SALN as of the said period, or resulting increase in networth by
amending such previously filed statements for purposes of this tax amnesty, thereby including
still undeclared assets and/or liabilities, as the case may be, as of December 31, 2005, or the
absolute minimum amnesty payment, whichever is higher."
Verily, petitioner La Flor complied with all the requirements under RA 9480 as implemented by
DOF DO No. 29-07 and paid the corresponding amnesty tax. Thus, having fully complied with
the conditions under RA 9480 and DOF DO No. 29-07, La Flor is entitled to the following
immunities and privileges:
Petitioner La Flor's compliance with the requirements under RA 9480 as implemented by DOF
DO No. 20-97 extinguished its tax liabilities, additions, and all appurtenant civil, criminal, or
administrative penalties under the NIRC. Specifically, petitioner La Flor is already immune from
the payment of deficiency taxes assessed for taxable year 1999 as per FLD dated March 14, 2005
and FDDA dated July 9, 2007, namely, IT, VAT, and compromise penalty, except the EWT and
WTC, which are not covered by RA 9480.
Further, La Flor's immunity from paying taxes under RA 9480 is effective despite the fact that
the CIR already issued the FDDA dated July 9, 2007 prior to its application for tax amnesty and
subsequent payment thereof. The FDDA dated July 9, 2007 issued by the BIR is not a tax case
subject of final and executory judgment by the court as contemplated under Section 8(f) of RA
9480. Hence, even with the issuance of the subject FDDA dated July 9, 2007, petitioner La Flor
is not disqualified to avail of the immunities and privileges under RA 9480.
In addition, the alleged compromise agreement for EWT and WTC filed by petitioner is not
considered as an abandonment of its availment of the tax amnesty under RA 9480. This is
especially when the Tax Amnesty Program does not include its assessed EWT and WTC
deficiencies for taxable year 1999 as per FDDA dated July 9, 2007.
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Clearly, La Flor validly applied for a compromise agreement even after filing its application for
tax amnesty under RA 9480.
Considering petitioner La Flor's compliance with the requirements under RA 9480 as

implemented by DOF DO No. 20-97, it is now deemed absolved of its obligations and is already
immune from the payment of the said taxes as well as additions, civil, criminal and
administrative penalties.
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II.C.9. Tax Refund or Tax Credit
HEDCOR SIBULAN, INC. V. COMMISSIONER OF INTERNAL REVENUE

G.R. No. 202093, September 15, 2021
By: michie
DOCTRINE:
Waiting for the lapse of the 120-day period before filing of a judicial claim under section
112 (c) of the NIRC, as amended, is mandatory and jurisdictional, hence, failure to observe
shall be considered as a proper ground for the dismissal of a judicial claim for a tax refund
or tax credits of unutilized input vat.
To further summarize, the following is the timeline and rules on the prescriptive period for
filing a tax refund or credit of unutilized input VAT under Section 112 of the Tax Code:
(1) Administrative Claim must be filed with CIR within 2 years after the close of the
taxable quarter when the zero-rated or effectively zero-rated sales were made.
(2) The CIR has 120 days from the date of submission of complete documents in
support of the administrative claim within which to decide whether to grant a
refund or issue a tax credit certificate. If the 120-day period expires without any
decision from the CIR, then the administrative claim may be considered to be
denied by inaction. XPN: The 120-day period may extend beyond the two-year
period from the filing of the administrative claim if the claim is filed in the later
part of the two-year period.
(3) Judicial claim must be with the CTA within 30 days from the receipt of the
CIR's decision denying the administrative claim or from the expiration of the
120-day period without any action from the CIR.
(4) All taxpayers, however, can rely on BIR Ruling No. DA-489-03 from the time of
its issuance on 10 December 2003 up to its reversal by this Court in Aichi on 6
October 2010, as an exception to the mandatory and jurisdictional 120+30-day
periods.
FACTS:
Petitioner Hedcor Sibulan, Inc. (Petitioner), a duly registered domestic corporation engaged in
the business of hydroelectric power generation and subsequent sale of power generation to
Davao Light and Power Company, Inc. (DLPCI), filed its Original Quarterly VAT Return for the
2nd Quarter of 2008 with BIR. Two years later, it filed an amended Quarterly VAT Return for the
same period.
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After two days, on June 25, 2010, petitioner also filed a written application for the refund or
issuance of a tax credit certificate (TCC) and an administrative claim for tax credit/ refund as to
the unutilized input VAT on purchases of goods and services attributable to zero-rated sales for
the 2nd quarter of 2008.
After just four days or on June 29, 2010, pending resolution of such administrative claim,
petitioner filed a petition for review before the CTA Third Division (judicial claim) seeking the
refund or the issuance of a TCC in its favor for the unutilized input VAT for purposes of
suspending the running of the 2-year prescriptive period for the filing of claims for refunds.
Respondent Commissioner of Internal Revenue sought the dismissal of the petition for
(1) being prematurely filed considering that only 4 days had lapsed from the filing of the
administrative claim allegedly disregarding the prescribed period of 120 days for the CIR
to rule on the claim under the National Internal Revenue Code and Revenue Regulations
No. 16-2005, as amended, and
(2) failure of petitioner to exhaust administrative remedies.
ISSUE:
Whether or not the judicial claim was prematurely filed?
RULING:
No, petitioner’s judicial claim was not prematurely filed.
Material to this case is Section 112 (C) of the NIRC which states that,
SEC. 112. Refunds or Tax Credits of Input Tax. —
(C) Period within which Refund or Tax Credit of Input Taxes shall be
Made. — In proper cases, the Commissioner shall grant a refund or issue the
tax credit certificate for creditable input taxes within one hundred twenty (120)
days from the date of submission of complete documents in support of the
application filed in accordance with Subsection (A) hereof.
In case of full or partial denial of the claim for tax refund or tax credit, or
the failure on the part of the Commissioner to act on the application within the
period prescribed above, the taxpayer affected may, within thirty (30) days from
the receipt of the decision denying the claim or after the expiration of the one
hundred twenty-day period, appeal the decision or the unacted claim with the
Court of Tax Appeals. (Emphasis Supplied.)
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The Supreme Court clarified that under this provision, the CIR has 120 days from date of
submission of complete documents to rule on an administrative claim of a taxpayer and ONLY
upon the expiration of such period or upon denial of the administrative claim should the taxpayer
file a judicial claim by filing an appeal before the CTA within 30 days from receipt of decision or
such expiration. This 120-day period is considered as mandatory and jurisdictional, hence,
should be strictly observed in order for the judicial claim to prosper and not be dismissed
EXCEPT when (1) the CIR, through a specific ruling, misleads a particular taxpayer to
prematurely file a judicial claim with the CTA, or (2) the CIR issued a general interpretative rule
in accordance with Section 4 of the Tax Code, which misleads ALL taxpayers into prematurely
filing judicial claims with the CTA. When any of these two exceptions exist, the CIR is no longer
allowed to question the CTA’s assumption of jurisdiction over the claim due to the setting in of
equitable estopped expressly authorized under Section 246 of the Tax Code.
For the resolution of the case at bar, it must be considered that there exists BIR Ruling No.
DA-489-03 issued on December 10, 2003, which provides that a taxpayer-claimant may seek
judicial relief with the CTA by filing a petition for review without waiting for the 120-day period
to lapse. Such BIR Ruling was only invalidated on October 6, 2010, through the ruling in the
case of Commissioner of Internal Revenue v. Aichi Forging Co. of Asia, Inc. wherein the
mandatory nature of the 120-day period was emphasized by the Supreme Court. Since the
administrative claim was filed on June 25, 2010, and the judicial claim was filed on June 29,
2010, it is clear that the judicial claim is still under the effect of the said BIR Ruling, hence,
falling under the second exception. Therefore, Petitioner’s judicial claim was not prematurely
filed.
ENERGY DEVELOPMENT CORPORATION VS. COMMISSIONER OF INTERNAL

REVENUE
G.R No. 203367, March 17, 2021
By: CPALawyer2023
DOCTRINES:
Atlas and Mirant dealt with the two-year prescriptive period for filing a tax refund or
credit provided in both Section 230 (now Section 229 of the NIRC) and Section 112 (A).
Specifically, the cases ruled on the two-year prescriptive period for the filing of
administrative claims reckoned from either:
1. the close of the taxable quarter when the zero-rated sales were made according to
the specific provision of law in Section 112 (A) as ruled in Mirant; and
2. the date of filing of the quarterly VAT return as ruled in Atlas drawing an analogy
to the then Section 230 of the 1977 Tax Code (now Section 229 of the NIRC) as an
erroneously or illegally collected tax.
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The ruling in Atlas was abandoned in Mirant which was subsequently affirmed in Aichi
where the 120+30 day jurisdictional periods was first raised.
The expiration of the 120-day period is mandatory and jurisdictional before a judicial
claim can be filed.
There are, however, two exceptions to this rule.

1. The first exception is if the Commissioner, through a specific ruling, misleads a
particular taxpayer to prematurely file a judicial claim with the CTA. Such specific
ruling is applicable only to such particular taxpayer.
2. The second exception is where the Commissioner, through a general interpretative
rule issued under Section 4 of the Tax Code, misleads all taxpayers into filing
prematurely judicial claims with the CTA.
BIR Ruling No. DA-489-03 is a general interpretative rule. Thus, all taxpayers can rely on
BIR Ruling No. DA-489-03 from the time of its issuance on 10 December 2003 up to its
reversal by this Court in Aichi on 6 October 2010, where this Court held that the 120+30
day periods are mandatory and jurisdictional.
However, BIR Ruling No. DA-489-03 cannot be given retroactive effect for four reasons:
1. it is admittedly an erroneous interpretation of the law;
2. prior to its issuance, the BIR held that the 120-day period was mandatory and
jurisdictional, which is the correct interpretation of the law;
3. prior to its issuance, no taxpayer can claim that it was misled by the BIR into filing
a judicial claim prematurely; and
4. a claim for tax refund or credit, like a claim for tax exemption, is strictly construed
against the taxpayer.
FACTS:
On March 30, 2009, EDC filed an administrative claim with the BIR for tax credit or refund of
its unutilized input VAT on its zero-rated sales for taxable year 2007.
On April 24, 2009, EDC filed an appeal/Petition for Review with the CTA.
The dates of EDC's filings of its 2007 Quarterly VAT Returns and administrative and judicial
claims for input VAT tax credit or refund are as follows:
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On June 18, 2009, CIR opposed the claim of EDC, arguing that EDC failed to substantiate its
claim for input VAT tax credit or refund by the submission of proper documents.
While, trial is ongoing, the Supreme Court promulgated its Decision in CIR vs. Aichi which
essentially ruled on the compliance with the 30-day or 120+30 day rule prior to the filing of a
judicial claim for refund.
On March 25, 2011, the CIR filed a Motion to Dismiss EDC’s Petition for Review citing EDC's
failure to comply with the prescriptive periods under Section 112 (C), of the NIRC. The CIR
alleged that EDC did not wait for: (a) the CIR's action on its administrative claim for input VAT
tax credit or refund before appealing to the CTA within 30 days, and (b) in the alternative of the
CIR's inaction, reckon the 30-day period to appeal from the expiration of 120 days from the date
of the submission of complete documents to support the administrative claim under Section 112
(A).
EDC opposed the CIR's motion to dismiss arguing that Aichi cannot be applied retroactively to
cases where the claim for input VAT tax credit or refund arose before Aichi's promulgation and
especially since the period relied upon for availment of remedies was based on prevailing
jurisprudence. EDC further argued that our ruling in Atlas Consolidated Mining and
Development Corporation v. Commissioner of Internal Revenue (Atlas) is apropos where we
ruled that the two-year prescriptive period under Section 22917 of the NIRC applies to claims for
refund or tax credit of unutilized input VAT.
CTA Division granted the Motion to Dismiss which was affirmed by CTA En Banc both
applying the Aichi Case where it rules that EDC prematurely filed its judicial claim or the appeal
to the CTA when it did not comply with the indispensable requirement for the taxpayer to await
the action or inaction of the CIR within the 120-day period as prescribed in Section 112 (C)
ISSUE:
Whether EDC timely filed its judicial claim or its petition for review before the CTA, for
unutilized input VAT tax credit or refund under Section 112, (A) and (D) of the NIRC
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RULING:
No, EDC did not comply with Section 112 (C) of the NIRC relative to the filing of its
judicial claim before the CTA.
However, applying the exception molded in San Roque, i.e., that "all taxpayers can rely on BIR
Ruling No. DA-489-03 from the time of its issuance on 10 December 2003 up to its reversal by
this Court in Aichi on 6 October 2010," EDC's petition for review before the CTA should be
reinstated since the filing of its administrative and judicial claims fell within the stated period.
COMMISSIONER OF INTERNAL REVENUE VS. PHILEX MINING CORPORATION

G.R. No. 218057, January 18, 2021
By: bsibsi
DOCTRINE:
The running of the 120-day period for the CIR to decide the claim for refund commences
from the time of the submission of complete documents in support of the tax refund
application.
For purposes of determining when the supporting documents have been completed – it is
the taxpayer who ultimately determines when complete documents have been submitted for
the purpose of commencing and continuing the running of the 120-day period.
After all, he may have already completed the necessary documents the moment he filed his
administrative claim, in which case, the 120-day period is reckoned from the date of filing.
The taxpayer may have also filed the complete documents on the 30th day from filing of his
application, pursuant to RMC No. 49-2003. He may very well have filed his supporting
documents on the first day he was notified by the BIR of the lack of necessary documents.
In such cases, the120-day period is computed from the date the taxpayer is able to submit
the complete documents in support of his application.
Under RMC No. 49-2003, if in the course of the investigation and processing of the claim,
additional documents are required for the proper determination of the legitimacy of the
claim, the taxpayer-claimants shall submit such documents within thirty (30) days from
request of the investigating/processing office.
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FACTS:
On January 21, 2010, Philex filed its original Quarterly VAT Return for the fourth quarter of
2009. Subsequently, on September 13, 2011, it filed an amended Quarterly VAT Return for its
total zero-rated sales, importation of goods with input tax, and purchase services with input tax.
Pursuant to Sec. 4.112-1 of RR No. 16-2005, Philex filed its claim for refund/tax credit with the
One Stop Shop Center of the Department of Finance on September 28, 2011.
The CIR failed to act on Philex’s administrative claim for refund which prompted Philex to file a
Petition for Review with the CTA on January 27, 2012.
The CTA Second Division partially granted Philex’s petition and ordered the CIR to refund the
amount representing its unutilized and excess input VAT attributable to its zero-rated sales for the
fourth quarter of 2009.
The CTA En Banc denied the CIR’s petition for review.
ISSUE:
Whether the CTA En Banc erred in affirming the CTA Second Division’s Decision ruling that
Philex is entitled to a tax refund.
RULING:
No, CTA En Banc did not err in affirming the CTA Second Division’s Decision ruling that
Section 112(c) of the National Internal Revenue Code (NIRC) provides:
SEC. 112. Refunds or Tax Credits of Input Tax. -
xxxx
(C)
Period within which refund or tax credit of input taxes shall be made.- In proper
cases, the Commissioner shall grant a refund or issue the tax credit certificate for
creditable input taxes within one hundred twenty (120) days from the date of
submission of complete documents in support of the application filed in
accordance with Subsection (A) hereof.
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xxxx
In case of full or partial denial of the claim for tax refund or tax credit, or the
failure on the part of the Commissioner to act on the application within the period
prescribed above, the taxpayer affected may, within thirty (30) days from the
receipt of the decision denying the claim or after the expiration of the one
hundred twenty day-period, appeal the decision or the unacted claim with the
Court of Tax Appeals.
The foregoing provision is clear. The running of the 120-day period for the CIR to decide the
claim for refund commences from the time of the submission of complete documents in support
of the tax refund application.
Records show that Philex filed its application for tax refund, attaching therewith the necessary
documents, on September 28, 2011. Pursuant to our pronouncement in Pilipinas Total Gas, Inc.,
it is Philex that determines the completeness of the documents submitted for purposes of
counting the 120-day period.
Within the period of 120 days from September 28, 2011, the CIR could have notified Philex, by
way of a request, to submit additional documents which he/she deems necessary. Considering
that no notice was given by the CIR or no other action was taken within the said 120 days, Philex
had 30 days from January 26, 2012, the expiration of the 120-day period, or until February 26,
2012, to appeal to the CTA. Again, records show that Philex properly and timely filed its judicial
claim on February 3, 2012. There is thus no merit in the CIR's contention that Philex's judicial
claim was premature or that its supporting documents were incomplete.
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II.C.9. Tax Refund or Tax Credit
HEDCOR SIBULAN, INC. V. COMMISSIONER OF INTERNAL REVENUE

G.R. No. 202093, September 15, 2021
By: michie
DOCTRINE:
Waiting for the lapse of the 120-day period before filing of a judicial claim under section
112 (c) of the NIRC, as amended, is mandatory and jurisdictional, hence, failure to observe
shall be considered as a proper ground for the dismissal of a judicial claim for a tax refund
or tax credits of unutilized input vat.
To further summarize, the following is the timeline and rules on the prescriptive period for
filing a tax refund or credit of unutilized input VAT under Section 112 of the Tax Code:
(1) Administrative Claim must be filed with CIR within 2 years after the close of the
taxable quarter when the zero-rated
0 0
or effectively zero-rated sales were made.
(2) The CIR has 120 days from the date of submission of complete documents in
support of the administrative claim within which to decide whether to grant a
refund or issue a tax credit certificate. If the 120-day period expires without any
decision from the CIR, then the administrative claim may be considered to be
denied by inaction. XPN: The 120-day period may extend beyond the two-year
period from the filing of the administrative claim if the claim is filed in the later
part of the two-year period.
(3) Judicial claim must be with the CTA within 30 days from the receipt of the
CIR's decision denying the administrative claim or from the expiration of the
120-day period without any action from the CIR.
(4) All taxpayers, however, can rely on BIR Ruling No. DA-489-03 from the time of
its issuance on 10 December 2003 up to its reversal by this Court in Aichi on 6
October 2010, as an exception to the mandatory and jurisdictional 120+30-day
periods.
FACTS:
Petitioner Hedcor Sibulan, Inc. (Petitioner), a duly registered domestic corporation engaged in
the business of hydroelectric power generation and subsequent sale of power generation to
Davao Light and Power Company, Inc. (DLPCI), filed its Original Quarterly VAT Return for the
2nd Quarter of 2008 with BIR. Two years later, it filed an amended Quarterly VAT Return for the
same period.
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After two days, on June 25, 2010, petitioner also filed a written application for the refund or
issuance of a tax credit certificate (TCC) and an administrative claim for tax credit/ refund as to
the unutilized input VAT on purchases of goods and services attributable to zero-rated sales for
the 2nd quarter of 2008.
After just four days or on June 29, 2010, pending resolution of such administrative claim,
petitioner filed a petition for review before the CTA Third Division (judicial claim) seeking the
refund or the issuance of a TCC in its favor for the unutilized input VAT for purposes of
suspending the running of the 2-year prescriptive period for the filing of claims for refunds.
Respondent Commissioner of Internal Revenue sought the dismissal of the petition for
(1) being prematurely filed considering that only 4 days had lapsed from the filing of the
administrative claim allegedly disregarding the prescribed period of 120 days for the CIR
to rule on the claim under the National Internal Revenue Code and Revenue Regulations
No. 16-2005, as amended, and
(2) failure of petitioner to exhaust administrative remedies.
ISSUE:
Whether or not the judicial claim was prematurely filed?
RULING:
No, petitioner’s judicial claim was not prematurely filed.
Material to this case is Section 112 (C) of the NIRC which states that,
SEC. 112. Refunds or Tax Credits of Input Tax. —
(C) Period within which Refund or Tax Credit of Input Taxes shall be
Made. — In proper cases, the Commissioner shall grant a refund or issue the
tax credit certificate for creditable input taxes within one hundred twenty (120)
days from the date of submission of complete documents in support of the
application filed in accordance with Subsection (A) hereof.
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In case of full or partial denial of the claim for tax refund or tax credit, or
the failure on the part of the Commissioner to act on the application within the
period prescribed above, the taxpayer affected may, within thirty (30) days from
the receipt of the decision denying the claim or after the expiration of the one
hundred twenty-day period, appeal the decision or the unacted claim with the
Court of Tax Appeals. (Emphasis Supplied.)
Case Digests 0 0
The Supreme Court clarified that under this provision, the CIR has 120 days from date of
submission of complete documents to rule on an administrative claim of a taxpayer and ONLY
upon the expiration of such period or upon denial of the administrative claim should the taxpayer
file a judicial claim by filing an appeal before the CTA within 30 days from receipt of decision or
such expiration. This 120-day period is considered as mandatory and jurisdictional, hence,
should be strictly observed in order for the judicial claim to prosper and not be dismissed
EXCEPT when (1) the CIR, through a specific ruling, misleads a particular taxpayer to
prematurely file a judicial claim with the CTA, or (2) the CIR issued a general interpretative rule
in accordance with Section 4 of the Tax Code, which misleads ALL taxpayers into prematurely
filing judicial claims with the CTA. When any of these two exceptions exist, the CIR is no longer
allowed to question the CTA’s assumption of jurisdiction over the claim due to the setting in of
equitable estopped expressly authorized under Section 246 of the Tax Code.
For the resolution of the case at bar, it must be considered that there exists BIR Ruling No.
DA-489-03 issued on December 10, 2003, which provides that a taxpayer-claimant may seek
judicial relief with the CTA by filing a petition for review without waiting for the 120-day period
to lapse. Such BIR Ruling was only invalidated on October 6, 2010, through the ruling in the
case of Commissioner of Internal Revenue v. Aichi Forging Co. of Asia, Inc. wherein the
mandatory nature of the 120-day period was emphasized by the Supreme Court. Since the
administrative claim was filed on June 25, 2010, and the judicial claim was filed on June 29,
2010, it is clear that the judicial claim is still under the effect of the said BIR Ruling, hence,
falling under the second exception. Therefore, Petitioner’s judicial claim was not prematurely
filed.
ENERGY DEVELOPMENT CORPORATION VS. COMMISSIONER OF INTERNAL

REVENUE
G.R No. 203367, March 17, 2021
By: CPALawyer2023
DOCTRINES:
Atlas and Mirant dealt with the two-year prescriptive period for filing a tax refund or
credit provided in both Section 230 (now Section 229 of the NIRC) and Section 112 (A).
Specifically, the cases ruled on the two-year prescriptive period for the filing of
administrative claims reckoned from either:
1. the close of the taxable quarter when the zero-rated sales were made according to
the specific provision of law in Section 112 (A) as ruled in Mirant; and
2. the date of filing of the quarterly VAT return as ruled in Atlas drawing an analogy
to the then Section 230 of the 1977 Tax Code (now Section 229 of the NIRC) as an
erroneously or illegally collected tax.
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The ruling in Atlas was abandoned in Mirant which was subsequently affirmed in Aichi
where the 120+30 day jurisdictional periods was first raised.
The expiration of the 120-day period is mandatory and jurisdictional before a judicial
claim can be filed.
There are, however, two exceptions to this rule.

1. The first exception is if the Commissioner, through a specific ruling, misleads a
particular taxpayer to prematurely file a judicial claim with the CTA. Such specific
ruling is applicable only to such particular taxpayer.
2. The second exception is where the Commissioner, through a general interpretative
rule issued under Section 4 of the Tax Code, misleads all taxpayers into filing
prematurely judicial claims with the CTA.
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BIR Ruling No. DA-489-03 is a general interpretative rule. Thus, all taxpayers can rely on
BIR Ruling No. DA-489-03 from the time of its issuance on 10 December 2003 up to its
reversal by this Court in Aichi on 6 October 2010, where this Court held that the 120+30
day periods are mandatory and jurisdictional.
However, BIR Ruling No. DA-489-03 cannot be given retroactive effect for four reasons:
1. it is admittedly an erroneous interpretation of the law;
2. prior to its issuance, the BIR held that the 120-day period was mandatory and
jurisdictional, which is the correct interpretation of the law;
3. prior to its issuance, no taxpayer can claim that it was misled by the BIR into filing
a judicial claim prematurely; and
4. a claim for tax refund or credit, like a claim for tax exemption, is strictly construed
against the taxpayer.
FACTS:
On March 30, 2009, EDC filed an administrative claim with the BIR for tax credit or refund of
its unutilized input VAT on its zero-rated sales for taxable year 2007.
On April 24, 2009, EDC filed an appeal/Petition for Review with the CTA.
The dates of EDC's filings of its 2007 Quarterly VAT Returns and administrative and judicial
claims for input VAT tax credit or refund are as follows:
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On June 18, 2009, CIR opposed the claim of EDC, arguing that EDC failed to substantiate its
claim for input VAT tax credit or refund by the submission of proper documents.
While, trial is ongoing, the Supreme Court promulgated its Decision in CIR vs. Aichi which
essentially ruled on the compliance with the 30-day or 120+30 day rule prior to the filing of a
judicial claim for refund.
On March 25, 2011, the CIR filed a Motion to Dismiss EDC’s Petition for Review citing EDC's
failure to comply with the prescriptive periods under Section 112 (C), of the NIRC. The CIR
alleged that EDC did not wait for: (a) the CIR's action on its administrative claim for input VAT
tax credit or refund before appealing to the CTA within 30 days, and (b) in the alternative of the
CIR's inaction, reckon the 30-day period to appeal from the expiration of 120 days from the date
of the submission of complete documents to support the administrative claim under Section 112
(A).
EDC opposed the CIR's motion to dismiss arguing that Aichi cannot be applied retroactively to
cases where the claim for input VAT tax credit or refund arose before Aichi's promulgation and
especially since the period relied upon for availment of remedies was based on prevailing
jurisprudence. EDC further argued that our ruling in Atlas Consolidated Mining and
Development Corporation v. Commissioner 0 0
of Internal Revenue (Atlas) is apropos where we
ruled that the two-year prescriptive period under Section 22917 of the NIRC applies to claims for
refund or tax credit of unutilized input VAT.
CTA Division granted the Motion to Dismiss which was affirmed by CTA En Banc both
applying the Aichi Case where it rules that EDC prematurely filed its judicial claim or the appeal
to the CTA when it did not comply with the indispensable requirement for the taxpayer to await
the action or inaction of the CIR within the 120-day period as prescribed in Section 112 (C)
ISSUE:
Whether EDC timely filed its judicial claim or its petition for review before the CTA, for
unutilized input VAT tax credit or refund under Section 112, (A) and (D) of the NIRC
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RULING:
No, EDC did not comply with Section 112 (C) of the NIRC relative to the filing of its
judicial claim before the CTA.
However, applying the exception molded in San Roque, i.e., that "all taxpayers can rely on BIR
Ruling No. DA-489-03 from the time of its issuance on 10 December 2003 up to its reversal by
this Court in Aichi on 6 October 2010," EDC's petition for review before the CTA should be
reinstated since the filing of its administrative and judicial claims fell within the stated period.
COMMISSIONER OF INTERNAL REVENUE VS. PHILEX MINING CORPORATION

G.R. No. 218057, January 18, 2021
By: bsibsi
DOCTRINE:
The running of the 120-day period for the CIR to decide the claim for refund commences
from the time of the submission of complete documents in support of the tax refund
application.
For purposes of determining when the supporting documents have been completed – it is
the taxpayer who ultimately determines when complete documents have been submitted for
the purpose of commencing and continuing the running of the 120-day period.
After all, he may have already completed the necessary documents the moment he filed his
administrative claim, in which case, the 120-day period is reckoned from the date of filing.
The taxpayer may have also filed the complete documents on the 30th day from filing of his
application, pursuant to RMC No. 49-2003. He may very well have filed his supporting
documents on the first day he was notified by the BIR of the lack of necessary documents.
In such cases, the120-day period is computed from the date the taxpayer is able to submit
the complete documents in support of his application.
Under RMC No. 49-2003, if in the course of the investigation and processing of the claim,
additional documents are required for the proper determination of the legitimacy of the
claim, the taxpayer-claimants shall submit such documents within thirty (30) days from
request of the investigating/processing office.
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FACTS:
On January 21, 2010, Philex filed its original Quarterly VAT Return for the fourth quarter of
2009. Subsequently, on September 13, 2011, it filed an amended Quarterly VAT Return for its
total zero-rated sales, importation of goods with input tax, and purchase services with input tax.
Pursuant to Sec. 4.112-1 of RR No. 16-2005,

0 0Philex filed its claim for refund/tax credit with the
One Stop Shop Center of the Department of Finance on September 28, 2011.
The CIR failed to act on Philex’s administrative claim for refund which prompted Philex to file a
Petition for Review with the CTA on January 27, 2012.
The CTA Second Division partially granted Philex’s petition and ordered the CIR to refund the
amount representing its unutilized and excess input VAT attributable to its zero-rated sales for the
fourth quarter of 2009.
The CTA En Banc denied the CIR’s petition for review.
ISSUE:
Whether the CTA En Banc erred in affirming the CTA Second Division’s Decision ruling that
RULING:
No, CTA En Banc did not err in affirming the CTA Second Division’s Decision ruling that
Section 112(c) of the National Internal Revenue Code (NIRC) provides:
SEC. 112. Refunds or Tax Credits of Input Tax. -
xxxx
(C)
Period within which refund or tax credit of input taxes shall be made.- In proper
cases, the Commissioner shall grant a refund or issue the tax credit certificate for
creditable input taxes within one hundred twenty (120) days from the date of
submission of complete documents in support of the application filed in
accordance with Subsection (A) hereof.
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xxxx
In case of full or partial denial of the claim for tax refund or tax credit, or the
failure on the part of the Commissioner to act on the application within the period
prescribed above, the taxpayer affected may, within thirty (30) days from the
receipt of the decision denying the claim or after the expiration of the one
hundred twenty day-period, appeal the decision or the unacted claim with the
Court of Tax Appeals.
The foregoing provision is clear. The running of the 120-day period for the CIR to decide the
claim for refund commences from the time of the submission of complete documents in support
of the tax refund application.
Records show that Philex filed its application for tax refund, attaching therewith the necessary
documents, on September 28, 2011. Pursuant to our pronouncement in Pilipinas Total Gas, Inc.,
it is Philex that determines the completeness of the documents submitted for purposes of
counting the 120-day period.
Within the period of 120 days from September 28, 2011, the CIR could have notified Philex, by
way of a request, to submit additional documents which he/she deems necessary. Considering
that no notice was given by the CIR or no other action was taken within the said 120 days, Philex
had 30 days from January 26, 2012, the expiration of the 120-day period, or until February 26,
0
2012, to appeal to the CTA. Again, records 0 that Philex properly and timely filed its judicial
show
claim on February 3, 2012. There is thus no merit in the CIR's contention that Philex's judicial
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II.D.1.a. Procedural Due Process in Tax Assessment
COMMISSIONER OF INTERNAL REVENUE VS. UNIOIL CORPORATION

G.R No. 204405, August 04, 2021
By: CPALawyer2023
DOCTRINES:
1. Tax collection must be preceded by a valid assessment to allow the taxpayer to

protest the assessment, present their case and adduce supporting evidence. Without
complying with the unequivocal mandate of first informing the taxpayer of the
government's claim, there can be no deprivation of property, because no effective
protest can be made
2. Section 203 of the NIRC mandates the government to assess internal revenue taxes
within three years from the last day prescribed by law for the filing of the tax return
or the actual date of filing of such return, whichever comes later. Hence, an
assessment notice issued after the three-year prescriptive period is no longer valid
and effective.
Exceptions to the period of limitation of assessment, however, are provided under

Section 222 of the same code, as in cases of:
a. filing of a false or fraudulent return with intent to evade tax or
b. failure to file a return or
c. a written agreement to waive and extend the period within which to assess
the taxpayer's liability.
The assessment contemplated in Sections 203 and 222 of the NIRC refers to the
service of the FAN upon the taxpayer.
A PAN merely informs the taxpayer of the initial findings of the Bureau of Internal
Revenue. It contains the proposed assessment, and the facts, law, rules, and
regulations or jurisprudence on which the proposed assessment is based. It does not
contain a demand for payment but usually requires the taxpayer to reply within 15
days from receipt. Otherwise, the Commissioner of Internal Revenue will finalize an
assessment and issue a FAN. The PAN is a part of due process. It gives both the
taxpayer and the Commissioner of Internal Revenue the opportunity to settle the
case at the earliest possible time without the need for the issuance of a FAN.
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A FAN contains not only a computation of tax liabilities but also a demand for
payment within a prescribed period. As soon as it is served, an obligation arises on
the part of the taxpayer concerned to pay the amount assessed and demanded. It
also signals the time when penalties and interests begin to accrue against the
taxpayer.
FACTS:
On January 26, 2009, Uniol received a Formal Letter of Demand (FLD) and Final Assessment
Notice (FAN) finding [it] liable for deficiency withholding tax on compensation and deficiency
expanded withholding tax for the year ending December 31, 2005.
On February 25, 2009 [Unioil] filed its protest to the FAN and subsequently submitted its
supporting documents on April 24, 2009.
On November 22, 2009 [Unioil] filed the instant Petition for Review due to inaction of the CIR,
180-day period had already expired.
CTA 3rd Division ruled that the CIR did not give Unioil due process when it failed to notify the
latter of the assessments for deficiency withholding taxes, specifically the CIR's issuance of the
Preliminary Assessment Notice (PAN) and Unioil's due receipt thereof in accordance with
Section 228 of the National Internal Revenue Code. CIR’s failure to strictly comply with the
notice requirements as laid down in Section 228 of the NIRC of 1997, as amended, and RR No.
12-99 amounts to the denial of [Unioil]'s right to due process, effectively voiding the
assessments issued.
CTA En Banc affirmed the decision.
CIR filed this petition for review on certiorari and submitted for the first time proof of its
issuance of a PAN and Unioil's actual receipt thereof. Thus, CIR reiterated that it complied with
the notice requirements for assessment under Section 228 of the NIRC and RR No. 12-99; Unioil
was not denied its right to due process. The CIR is adamant that it did issue a PAN which had
been duly acknowledged and received by Unioil.
ISSUES:
1. Whether the assessment is void
RULING:
Yes, the Formal Letter of Demand and F43-128 are void; they did not state the factual and
legal bases for the assessment.
The CIR only perfunctorily assessed Unioil for deficiency withholding tax on compensation and
expanded withholding tax and went through just the motions without due consideration.
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This is apparent from the haste in which the Formal Letter of Demand and the FAN were issued
on January 14, 2009 in order to ostensibly beat the three-year prescriptive period which set after
January 15, 2009.
2. Whether the three-year assessment period has prescribed
RULING:
Yes, the CIR's assessment of Unioil for deficiency withholding taxes has prescribed.
The CIR cavalierly invokes Section 72 of the NIRC without explicitly stating that Unioil had
filed a false or fraudulent return. Moreover, in the "Details of Discrepancy" stated in the FAN
and Formal Letter of Demand, the CIR consistently cited that "the corresponding tax due was
computed in accordance with Section 72 (e) of the Tax Code.
Here, apart from the CIR' s bare allegation of falsity or fraudulency in Unioil's filed returns, the
CIR neither states nor points to any other detail establishing actual fraud committed by Unioil.
0
The CIR does not substantiate its allegation 0 fraud and appears to make the argument only to
of
evade the three-year prescriptive period to assess the tax.
There is no prima facie evidence, much less any sort of evidence, that Unioil filed false and
fraudulent returns on the ground of substantial under declaration of income in Unioil's Annual
Income Tax Return for taxable year ending December 31, 2005.
We observe that the assessment notices, from the Post Reporting Notice to the Formal Letter of
Demand, erroneously cited Section 72 (e) of the NIRC. As pointed out by Unioil in its separate
Protests to the PAN and the FAN, and all its pleadings before the tax court and this Court,
Section 72 of the NIRC has no subsection (e).
If the CIR indeed substantiated their vaguely drawn imputation that Unioil had filed a fraudulent
return, there was no reason for the speed with which they issued the Formal Letter of Demand.
Plainly, the Formal Letter of Demand was hastily issued and did not take into consideration the
arguments of Uni oil in its Protest to the PAN. The Formal Letter of Demand and the FAN were
ostensible automated assessments merely echoing the PAN.
From the date of the Formal Letter of Demand and the FAN which were simultaneously issued
on January 14, 2009 and only received by Unioil on January 26, 2009, the three-year prescriptive
period reckoned from the deadline set by law for the filing of the return, assessment of the
January to November 2005 monthly remittance returns has palpably prescribed.
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II.D.1.d. Prescriptive Period for Assessment
LA FLOR DELA ISABELA, INC. VS. COMMISSIONER OF INTERNAL REVENUE

G.R. No. 202105, April 28, 2021
By: riversioson
DOCTRINE:
Under BIR Revenue Memorandum Order (RMO) No. 20-90, which provides for the
guidelines in the proper execution of the waiver of statute of limitations under the NIRC. It
holds that a valid waiver of statute of limitations must be:
a. in writing;
b. agreed to by both the Commissioner and the taxpayer;
c. before the expiration of the ordinary prescriptive periods for assessment and
collection; and
d. for a definite period beyond the ordinary prescriptive period for assessment and
collection.
The period agreed upon can still be extended by a subsequent written agreement, provided
that it is executed prior to the expiration of the first period agreed upon.
Parenthetically, Revenue Delegation Authority Order (RDAO) No. 05-01 dated August 2,
2001, authorized subordinate officials to sign the waivers and introduced a new waiver
form.
This Court had invalidated waivers which did not strictly comply with the provisions of
RMO No. 20-90 and RDAO No. 05-01, such as, but not limited to:
a. failure to state the specific date within which the BIR may assess and collect revenue
taxes;
b. failure to sign by the CIR as mandated by law or by his duly authorized
representative; 0 0
c. failure to indicate the date of acceptance to determine whether the waiver was
validly accepted before the expiration of the original three-year period;
d. failure to furnish the taxpayer of a copy of the waiver;
e. failure to indicate on the original copies of the waivers the date of receipt by the
taxpayer of their file copy;
f. execution of the waivers without the written authority of the taxpayer's
representative to sign the waiver on their behalf;
g. absence of any proof that the taxpayer was furnished a copy of the waiver;
h. a waiver signed by the Assistant Commissioner-Large Taxpayers Service and not by
the CIR;
i. failure to specify the kind and amount of tax due; and
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Case Digests
j. a waiver which refers to a request for extension of time within which to present
additional documents and not for reinvestigation and/or reconsideration of the
pending internal revenue case.
FACTS:
On September 6, 2000, the CIR issued a Letter of Authority for the examination of La Flor's
books of account for "all internal revenue taxes for CY 1999. In connection with this, La Flor
executed five statutes of limitations waivers to extend the CIR's time to assess and collect the
deficiency taxes.
On April 8, 2003, the company received a Preliminary Assessment Notice dated March 19, 2003.
On March 14, 2005, La Flor received a Formal Letter of Demand (FLD) for deficiency income
tax, value-added tax (VAT), withholding tax (WT) on compensation; and for compromise
penalty.
The company submitted its protest against the FLD on March 30, 2005, and a Supplemental
Protest Letter on April 12, 2005.
Following that, on July 9, 2007, it received the CIR's Final Decision on Disputed Assessments
(FDDA) dated June 1, 2007.
On October 8, 2007, La Flor claimed a tax amnesty under Republic Act No. (RA) 9480, as well
as a compromise on October 18, 2007, under Section 204 of the National Internal Revenue Code
(NIRC).
The CIR issued an undated Warrant of Distraint and/or Levy (WDL) to the company on
November 23, 2007. On November 29, 2007, the petitioner filed a Petition for Review with the
CTA, challenging the CIR's issuance of WDL.
The CTA (Second Division) dismissed La Flor's petition because it was filed too late. It held that
La Flor had thirty (30) days from July 9, 2007, to appeal the CIR's FDDA under Section 228 of
the NIRC, as amended, or to elevate its complaint to the Commissioner under Section 3.1.5 of
Revenue Regulations No. 12-99. However, instead of appealing the FDDA or raising its protest
to the Commissioner, La Flor took advantage of the tax amnesty under RA 9480 for its assessed
IT and VAT deficiencies and filed an application for compromise for its assessed WT
deficiencies on October 8, 2007, and October 18, 2007, respectively. Hence, its Petition for
Review, filed on November 29, 2007, or three months after July 9, 2007, with the CTA in
Division, clearly exceeded the 30-day reglementary period. The FDDA dated June 1, 2007, had
thus become final, executory, and demandable.
La Flor filed a Motion for Reconsideration, which was denied by the CTA Division in its
Resolution of August 4, 2010. Afterward, on September 7, 2010, La Flor filed a Petition for
Review with the CTA En Banc.
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La Flor's petition was dismissed by the CTA En Banc for lack of merit. It decided that if the CIR
does not act on a protest within 180 days of the filing of supporting documents, the taxpayer may
file an appeal with the CTA within 30 days of the expiration of the 180-day term. The petitioner
timely submitted its protest on March 30, 2005, when the CIR published its FLD dated March
21, 2005. On April 12, 2005, it filed a Supplemental Protest Letter in order to submit additional
documentation.
However, because the CIR did not act on La Flor's objection within 180 days of receiving its
Supplemental Protest Letter on April 12, 2005, the petitioner had 30 days from October 9, 2005,
or until November 8, 2005, to submit a Petition for Review with the CTA. The petitioner, on the
other hand, slept on its right and sought0 relief0 only on November 29, 2007, more than two years
after the reglementary period had expired. Despite the fact that the 30-day period to appeal began
to run only on July 9, 2007, when La Flor received the CIR's FDDA dated June 1, 2007, La

Taxation Law Case Digests Hernando Bar 2023 - Compress

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SEPTEMBAR 2023

BAR OPERATIONS: HERNANDO

"Always remember, chance favors the #HernanDoIt

● BUREAU OF INTERNAL REVENUE VS. SAMUEL B. CAGANG, 1

II. National Taxation

● HEDCOR SIBULAN, INC. V. COMMISSIONER OF INTERNAL 9

B. Tax Remedies Under the National Internal Revenue

● COMMISSIONER OF INTERNAL REVENUE VS. UNIOIL 17

d) Prescriptive Period for Assessment

● COMMISSIONER OF INTERNAL REVENUE VS. SAN 25

IV. Judicial Remedies

● LA FLOR DELA ISABELA, INC. VS. COMMISSIONER OF 31

● PEOPLE OF THE PHILIPPINES VS. BENEDICTA 37

I.F.9. Compromise and Tax Amnesty

BUREAU OF INTERNAL REVENUE VS. SAMUEL B. CAGANG

Taxation Law_HernandoBAR2023 Page 1 of 39

Whether CEDCO is entitled to avail of the tax amnesty under RA 9480

a) Withholding agents with respect to their withholding tax

Taxation Law_HernandoBAR2023 Page 2 of 39

a) Withholding agents with respect to their withholding tax

e) Those with pending criminal cases filed in court or in the

PEOPLE OF THE PHILIPPINES VS. GLORIA F. TUYAY

Taxation Law_HernandoBAR2023 Page 3 of 39

Whether or not Tuyay was disqualified to avail of the tax amnesty

No, Tuyay was not disqualified to avail of the tax amnesty.

Taxation Law_HernandoBAR2023 Page 4 of 39

LA FLOR DELA ISABELA, INC. VS. COMMISSIONER OF INTERNAL REVENUE

In Commissioner of Internal Revenue v. Philippine Aluminum Wheels, Inc., we ruled that

Taxation Law_HernandoBAR2023 Page 5 of 39

Whether La Flor is entitled to tax amnesty

Yes, La Flor is entitled to a tax amnesty.

Taxation Law_HernandoBAR2023 Page 6 of 39

Taxation Law_HernandoBAR2023 Page 7 of 39

Considering petitioner La Flor's compliance with the requirements under RA 9480 as

Taxation Law_HernandoBAR2023 Page 8 of 39

II.C.9. Tax Refund or Tax Credit

HEDCOR SIBULAN, INC. V. COMMISSIONER OF INTERNAL REVENUE

Taxation Law_HernandoBAR2023 Page 9 of 39

(2) failure of petitioner to exhaust administrative remedies.

Whether or not the judicial claim was prematurely filed?

No, petitioner’s judicial claim was not prematurely filed.

SEC. 112. Refunds or Tax Credits of Input Tax. —

Taxation Law_HernandoBAR2023 Page 10 of 39

ENERGY DEVELOPMENT CORPORATION VS. COMMISSIONER OF INTERNAL

Taxation Law_HernandoBAR2023 Page 11 of 39

There are, however, two exceptions to this rule.

Taxation Law_HernandoBAR2023 Page 12 of 39

Taxation Law_HernandoBAR2023 Page 13 of 39

COMMISSIONER OF INTERNAL REVENUE VS. PHILEX MINING CORPORATION

Taxation Law_HernandoBAR2023 Page 14 of 39

The CTA En Banc denied the CIR’s petition for review.

Section 112(c) of the National Internal Revenue Code (NIRC) provides:

SEC. 112. Refunds or Tax Credits of Input Tax. -

Taxation Law_HernandoBAR2023 Page 15 of 39

Taxation Law_HernandoBAR2023 Page 16 of 39

II.C.9. Tax Refund or Tax Credit

HEDCOR SIBULAN, INC. V. COMMISSIONER OF INTERNAL REVENUE

Taxation Law_HernandoBAR2023 Page 9 of 39

(2) failure of petitioner to exhaust administrative remedies.

Whether or not the judicial claim was prematurely filed?

No, petitioner’s judicial claim was not prematurely filed.

SEC. 112. Refunds or Tax Credits of Input Tax. —

Taxation Law_HernandoBAR2023 Page 10 of 39